Are you looking for countries with no income tax to live in? Then, you will easily find what you seek in this guide.
Firstly, income tax is one of the most widespread ways governments raise revenue, but it is not the only way.
Some countries rely on oil and other resources instead of levying income tax on citizens and foreigners.
However, governments can also strategically cancel income tax to attract more investors.
If you want to move to one of those countries, we will introduce you to the best countries without income tax.
You will have the following:
- Countries with no personal income tax,
- No capital gains tax countries, and
- Countries granting citizenship by investment
Let’s get started.
List of countries, including the ones that offer citizenship or residency by investment programs
Investing in a country without income tax can be significantly more manageable and beneficial.
Below, we will outline some popular nations that provide citizenship through investment and are considered ‘countries without income tax.’
- Bahamas
- United Arab Emirates (UAE)
- Monaco
- Dominica
- Kuwait
- Bahrain
- Brunei
- Maldives
- Vanuatu
- Cayman Islands
1. Bahamas
First on our list is the Bahamas, which stands out as one of the ‘countries with zero income tax.’ In this country, which dazzles with turquoise waters, you do not have to pay any income tax.
Not limited to this, you do not pay gift, capital, and inheritance tax while living here. So, if you want to buy and sell something, you are free.
Many investors also refer to the Bahamas as a ‘tax haven.’ It is worth checking out because it is a famous ‘zero-tax’ country.
In addition, the Bahamas does not prevent foreign investors from buying property. Under the Bahamas citizenship by investment program, you can even become a full citizen.
How? By purchasing a $500,000 property, you can gain permanent residency in the Bahamas. Remember that you can also include your family members in the application.
2. United Arab Emirates (UAE)
The United Arab Emirates is one of the economically strong countries with rich oil and natural gas resources.
Although it does not charge income tax, it levies a 5% value-added tax on service or product purchases.
It also imposes an excise tax on some products that are considered harmful to health and a corporate tax on company earnings.
When we evaluate these, the UAE is among the ‘Golden Visa Countries’ suitable for investment because it does not have a heavy tax burden.
Under the Dubai Golden Visa Program, you can invest AED 2,000.00 and gain the right of residence for up to 10 years.
3. Monaco
Monaco’s residents and foreign citizens (except French) are exempt from income tax. The French exclusion stems from a 1963 bilateral treaty between Monaco and France.
Let’s say something surprising: Unlike other countries, Monaco does not have a wealth, property, or residence tax. This is an unmissable opportunity to invest in the Principality of Monaco.
However, the ‘zero tax’ advantage requires a ‘Monaco Residence Card.’
How to get it? Now, you can earn your right of residence by applying for the Monaco Residence By Investment Program.
The investment requirement is straightforward. Deposit and maintain €500,000 in a Monaco-affiliated bank account. Then, show a clean criminal record and a document proving your financial strength.
Don’t forget that you can get permanent residence after 9 years using this route.
4. Dominica
Dominica has an income tax system that taxes individuals progressively.
Earnings between $0-$30,000 are taxed at 0%.
At $30,001 and above, a 15% tax applies.
Citizens can then be taxed up to 25% and 35%.
There is a great way to become a resident in Dominica: Dominica Citizenship By Investment
With an investment of only $200,000, you can gain citizenship in 3-6 months and enjoy visa-free travel to 144 countries.
5. Kuwait
Kuwait does not levy taxes on real estate, VAT, withholding, or sales, especially on personal income.
So you might be thinking, how is Kuwait so tax-friendly?
One reason is that Kuwait, a wealthy but small country, relies on the oil trade as its primary source of income.
However, Kuwait is not yet one of the countries offering citizenship by investment. You can apply for work and partial residence visas to live there.
6. Bahrain
Bahrain offers a unique system that eases your individual or company tax burden. Firstly, as an individual, you are not subject to income tax.
Secondly, without facing capital gains tax, you can receive a dividend deduction that greatly enhances your financial planning.
Bahrain’s approach to economic freedom goes beyond income and capital tax exemptions. You pay only 10% VAT on certain domestic transactions, with no tax burden on other transactions.
However, working in the oil and gas sector is a bit different. Companies in this sector pay a tax rate of 46%. If you operate in other sectors, you can immediately benefit from Bahrain’s economic advantages.
In addition, with the Bahrain Golden Residence Visa, you can reside in the country by investing up to 200,000 BD.
7. Brunei
When living in Brunei, you do not pay tax on your income. Also, there is no VAT and no social security tax.
However, whether you are a local citizen or a foreigner, you are required to contribute 5% of your income to a government-established welfare fund.
Also, Brunei does not have formal citizenship by investment program similar to the ‘Golden Visa’. You can use a work visa to reside here.
8. Maldives
You do not have to pay any income tax up to a specific limit in the Maldives.
The rule is simple: do not exceed 720,000 MVR.
Then taxation will be as follows:
- 720,000 – 1,200,000 MVR: 5.5
- 1.200.001 – 1.800.000 MVR: 8
- 1.800.001 – 2.400.000 MVR: 12
- 2.400.001 MVR and above: 15%
Maldives has a residency by investment program targeting high-income individuals.
Under the program, it is necessary to invest $50 million or more and maintain $1 million in a bank deposit account linked to the Maldives for 2 years.
9. Vanuatu
The Vanuatu government does not levy income tax on individuals.
Other taxes not available in Vanuatu:
- Capital levy
- Export tax
- Inheritance tax
- Property tax
- Wealth tax
In addition, VAT is included in the country’s normal selling price. This means that VATs do not have to be paid separately.
The VAT rate included in the product price is 12.5%, which is lower than in many countries.
If you have plans for Vanuatu, you can invest $130,000 in the Vanuatu citizenship by investment program.
In this way, you can obtain your official citizenship in Vanuatu, which has no dual citizenship restrictions, in as little as 1-2 months.
10. Cayman Islands
Thanks to its substantial tax advantages, the Cayman Islands is one of the most ideal destinations for foreign investors. Firstly, citizens are not taxed on their income.
There is also no company, gift, or capital gains tax. Not only that but there are also no prohibitive controls on foreigners acquiring property.
If you are a foreign investor, you can gain residency by investing $2.4 million through the ‘Cayman Islands Residency By Investment Program.’
Final Words
Living in a country without income tax offers a unique opportunity. Each country on this list offers different advantages, whether it is the pristine beaches of the Bahamas, the rich cityscapes of the UAE, or the tranquil beauty of the Maldives.
Before moving, consider factors such as residency or citizenship requirements, cost of living, and potential alternative taxes such as VAT or excise duties.
Understanding the nuances of each country’s tax structure and residency programs allows you to make informed decisions that align with your financial goals and lifestyle aspirations.
Whether you are an entrepreneur, investor, or digital nomad, these tax-friendly destinations offer a gateway to financial efficiency and a luxurious lifestyle.
Frequently Asked Questions
What is the best country to live in without taxes?
It depends on your preferences. However, you can find several countries that require no personal income tax, meaning that you are not taxed on your earnings. Those countries include UAE, Bahrain, Oman, and the Cayman Islands. Some might consider corporate tax free countries as an option or low tax countries.
Which country has no income tax?
There are some countries that have no personal income tax. For example, in the United Arab Emirates, Bahrain, Oman, and the Cayman Islands, you do not have to pay a personal income tax. On the other hand, there are some countries that impose income tax.
Do Americans living in Dubai pay taxes?
Americans living in Dubai are not subject to UAE income tax, as one of the countries with no income tax. However, you may still be required to file a US tax return and pay taxes to the US government on your worldwide income. So, even though you live in a tax free country, it is better to double-check the requirements you need to meet in your native country. Besides, there may be some other considerations like corporate income tax or payroll tax when planning your financial obligations towards countries.
